Asset allocation w/o bond funds & limited tax deferred space

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Blessed2BNUSA
Posts: 3
Joined: Wed Jul 24, 2013 6:24 pm

Asset allocation w/o bond funds & limited tax deferred space

Post by Blessed2BNUSA » Wed Oct 10, 2018 8:21 pm

Asset allocation guidance needed. Issues are as follows:
1. Am not comfortable with bond funds in portfolio only cd/treasuries/cash
2.Taxable space is limited due to individual stocks with sizable capital gains that can not be sold..

Emergency fund = 6 months Ibonds 2.2%
Debt: no debt
Tax Filing Status:Married Filing Jointly
Tax Rate: 24% , State 0% state tax
Age: 52, 48
Desired Assert Allocation (60 stocks & 40 cds/treasuries)
Desired Intl allocation: 10-15% I'm no where close.
401K contributions 22.5k and 18.5k

Current portfolio: High 6 figures
Taxable
Individual Stocks:do not wish to sell due to large capital gains, but plan to sell upon early retirement.
8.7% AFLAC
9.1% Berkshire Hathaway
1.4% Coca-Cola
9.6% Exxon
2.5% Lowes
6.2% Sysco
2% Colgate
2% Pepsico
2.9% State Street
.7% other

Taxable Funds
9.8% Vanguard Total Stock Market (would rather not sell due to gains)
1.3 Vanguard Federal Money Market

HIS IRA at Vanguard
1% Vanguard Federal money market
1.5% Treasuries notes

HIS Roll-over IRA
3% vanguard Total INTL
1% Vanguard Federal money market
.7% Vanguard Total Stock Market
5.9% Vanguard Treasury Money Market

HIS Roll-over IRA
2.5 Vanguard Federal money market

HIS Sep IRA
.5 Vanguard Life Strategy Moderate Growth

His Roth IRA
1% Vanguard Real Estate Index
4.2% Vanguard Treasury Money Market
3.5% Vanguard Wellington
1% CD

HIS 401k (only VG Funds)
2.5% Vanguard Target Retirement 2030

HER IRA
3.6% Vanguard Treasury Money Market

HER Roth IRA
1.3% Vanguard Total Stock Market
2% Bershire Hathaway B shares
2.6% CD

HER 401K (VG Funds only)
.6% Vanguard Total Stock Market
.6% Vanguard Wesllesley Income Fund

HSA
3% Cash

Questions:
1. In order lower stock asset allocation what if I exchange tax deferred accounts with .6% Vanguard Wesllesley Income Fund, 3.5% Vanguard Wellington,2% Berkshire Hathaway B shares, 2.5% VG target date 2030 for CD's/ individual treasuries/money market funds in retirement funds? Where I have money markets, I will exchange these for individual treasuries/cd's for more growth than money markets? I can not buy individual securities in 401k only funds.
2. Retirement accounts will not grow with limited stock exposure so I would like each retirement account to have 10%-20% stock is this reasonable?
3. I would like to add FTSE World but not sure where to add it?
4. I like having the REIT but with the interest rate going up and such a small position should I exchange it for treasuries/cd's?
5. Open to any other advice?

Thank you in advance.

Living Free
Posts: 130
Joined: Thu Jul 19, 2018 7:31 pm

Re: Asset allocation w/o bond funds & limited tax deferred space

Post by Living Free » Wed Oct 10, 2018 8:40 pm

I would probably not keep the cash equivalents (money market) in the retirement accounts. Maybe TIPS would be a good alternative option there? It looks like you have all the IRAs with vanguard, so could consider their VIPSX fund. Or one of the other vanguard treasury funds. I'd do intermediate term.

FYI vanguard total bond index is like 70% government bonds. so mostly government bonds.

Also the vanguard target date funds hold the total bond market index as one of their 4 holdings, so you've got some corporate bonds there.

Blessed2BNUSA
Posts: 3
Joined: Wed Jul 24, 2013 6:24 pm

Re: Asset allocation w/o bond funds & limited tax deferred space

Post by Blessed2BNUSA » Thu Oct 11, 2018 2:11 pm

Thank you for the reminder that vanguard target date funds hold the total bond market index. I had overlooked it.

UpperNwGuy
Posts: 1234
Joined: Sun Oct 08, 2017 7:16 pm

Re: Asset allocation w/o bond funds & limited tax deferred space

Post by UpperNwGuy » Thu Oct 11, 2018 2:19 pm

Why are you not comfortable with bond funds?

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